Karen Dudnikov and Michael Meadors were tired of having eBay close down their auctions and decided to fight back. A computer programmer, Michael has become an expert in Trademark and Copyright law after going up against corporate giants like Mars and Disney. Representing themselves, Karen and Michael have won their legal battles against corporate lawyers, and are currently suing Major League Baseball in Federal Court.

Karen, an accountant turned seamstress and entrepreneur, makes handmade items and sells them online and on eBay. She uses copyrighted fabric to make items like comforters, tissue box holders and aprons.

Last year, Disney used eBay's VeRO program to request the company cancel Karen's auctions for items made with copyrighted Disney fabric. When eBay complied and pulled three of Karen's auctions, she and her husband Michael fought back - and won.

Disney is enrolled in eBay's VeRO program (http://members.ebay.com/aboutme/disneyvero). The Verified Rights Owners program was developed to "facilitate cooperation between eBay and rights owners protecting their intellectual property rights."

The issue comes down to trademark and copyright law. Disney claimed infringement, saying Karen's handmade items were "derivatives." Michael told AuctionBytes that derivatives must be in and of itself copyrightable. "A tissue box cover is not copyrightable," he said.

Michael compares the battle to someone selling a used Ford automobile. A seller can say what the item is (a Ford) and include a photograph of the car. "There is nothing illegal about buying a car, souping it up, and selling it," he explained.

Karen includes a disclaimer in her auctions that the items she sells are not licensed products. A current eBay auction for a Winnie the Pooh comforter (http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&category=138&item=2186249262) includes the disclaimer, "This is not a licensed Disney product. It is however, crafted from licensed Disney fabrics. Tabberone is not affiliated with Disney."

However, it took a Federal Court to persuade Disney to back down. Karen and Michael said they did not want to "wait and spar to no end with the lawyers for Disney." On December 24, 2002, they sued Disney in Federal Court and filed for Declaratory Judgment. On February 4, 2003, the case was settled, and Michael says Disney agreed to "leave them alone."

But that was not the end of the story. On March 31, 2003, Major League Baseball Properties (MLBP) ordered eBay to terminate three of Karen's auctions that featured fabric items made from their licensed fabrics. Three days later, Karen Dudnikov filed a lawsuit against Major League Baseball Properties in Federal District Court in Colorado.

According to Karen and Michael, MLBP shut down her auctions claiming she used "protected Major League Baseball-related trademarks without authorization" and that the fabric products, tissue box covers, were derivative works and therefore violations of copyright laws.

"MLBP is just another in a long line of corporation bullies who are trying to use their size and legal thugs to intimidate people when they're not doing anything wrong," said Karen.

Major League Baseball is the fifth billion-dollar company Karen and Michael have tackled over the use of licensed fabrics. Two years ago, Warner Brothers relented after a brief exchange. Then came M&M/Mars, Precious Moments and Disney Enterprises.

This time, Michael and Karen vow not to settle. Tired of battling companies individually only to have the companies settle with them, they are determined to have the courts decide the case. Michael is confident they will win the case against MLBP. He believes it will help not only their own business, but other eBay sellers as well.

When eBay sellers receive a "cease and desist" letter from a big law firm in New York, they are intimidated, Michael said. And when they look at federal law, it is written in a confusing manner. He hopes to have a specific court ruling that he and other sellers can point to so corporations will leave them alone.

Michael points out that not all eBay sellers are innocent of trademark infringement. But if a seller is certain their auctions are not infringing trademark and copyright laws, they should review the information on his site and speak to a lawyer.

It has taken an enormous amount of time to research cases. And in each battle, Michael and Karen lose sales until a settlement is reached. They lost major sales for two Christmas seasons, the most important season in retail, forcing Karen to go back to work.

In referring to the current battle with Major League Baseball, Michael says, "We have the law on our side. It's a slam dunk."

http://www.tabberone.com/Trademarks/DisneyLawsuit/disneylawsuit.html

http://www.tabberone.com/Trademarks/MLB/ourlawsuit/complaint.html